Sam Inc is an unlisted company, which has had huge investments in research and development over the years. These investments in research and development resulted in the company having a competitive advantage, as well as technological and cost advantages. The company experienced consequential rapid growth due to these advantages. In order to secure investors to fund the company's research and development activities and the growth of Sam Inc, the company's vice presidents $($VPs$)$ are asking business valuation questions, which the CFO of Sam Inc. will need to address at his next meeting with the VPs$.$

Sam Inc.$\text{'}$s earnings and profits are expected to grow at the following rates: $15\%$ next year $($year$,14\%$ in the following year $($year $2),$ and $12\%$ in year $3.$ The competitors' manufacturing processes are expected to improve by year $4$ and it is anticipated that this will end the super$-$normal growth for Sam Inc. The growth rate for year $4$ and thereafter will then become a constant rate of $8\%.$ The company paid a dividend of $$3\mathrm{.}50$ per share last year and the firm's cost of capital is

$14\%.$

Required: To assist the CFO of Sam Inc. with the questions from the VPs:

i$)$ Determine Sam Inc.$\text{'}$s terminal or horizon value?

ii$)$ Provide the value of the stock today $(P_0)$

iii$)$ What is the value of the stock at $P_1?$

iv$)$ As an unlisted company Sam Inc. faces various valuation challenges. Outline three $(3)$ practical considerations Sam Inc.$\text{'}$s management should consider in the valuation of the business.